Answers to Frequently Asked Questions About The Insurance Claim Process
Do you have questions about commercial and business insurance litigation, business claims law, bad faith insurance litigation, industrial insurance claims litigation, condominium insurance claims, church claims, apartment claims, first party bad faith insurance claims, and marine insurance claims? To discuss your case, contact The Voss Law Firm, P.C. toll free at 888-614-7730.
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Can you describe the basic steps which are involved in the litigation process in Texas?
Your case is initiated by filing a lawsuit with the Clerk of Court. The debtor is served with the lawsuit by an authorized process server and then becomes a Defendant in the case. At this stage, third parties may be brought into the lawsuit as necessary. Basically, a Defendant has twenty (20) days within which to respond to the initial lawsuit or be defaulted.
After this initial pleading stage, the parties enter into the “discovery” stage. Sworn testimony can be elicited from the Defendant and other witnesses concerning the facts of the case. A Defendant who improperly disputes a claim may be exposed at this stage.
As discovery winds down, the parties are typically required to attend non-binding mediation. At this stage, the parties attempt to voluntarily resolve the case with the help of a trained mediator. The vast majority of cases are resolved at the mediation stage.
If the parties are unable to voluntarily settle the claim, the parties prepare for and proceed to trial. The issues in the trial can be decided either by a single judge or by a panel (jury) of disinterested citizens chosen from the community.
If you prevail at trial, you will be awarded a judgment. The Defendant may pay the judgment once a decision has been rendered. It is also possible for a Defendant to appeal a money judgment, but the judgment debtor is required to post a significant cash bond for the right to appeal the trial court’s decision to the appellate court.
Do I need business interruption insurance?
Business interruption insurance can be as vital to your survival as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire or windstorms. But too many small businessowners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not sold separately. It is added to a property insurance policy or included in a package policy.
A business that has to close down completely while the premises are being repaired may lose out to competitors. A quick resumption of business after a disaster is essential.
1. Business interruption insurance compensates you for lost income if your company has to vacate the premises due to disaster-related damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the profits you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
2. Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take more time than many people anticipate to get the business back on track. There is generally a 48-hour waiting period before business interruption coverage kicks in.
3. The price of the policy is related to the risk of a fire or other disaster damaging your premises. All other things being equal, the price would probably be higher for a restaurant than a real estate agency, for example, because of the greater risk of fire. Also, a real estate agency can more easily operate out of another location.
What are the 17 Hague/COGSA defenses?
The Hague/COGSA Act was developed to protect vessel owners against legal liability to shippers for circumstances out of their control. It was conceived during the post World War I era when vessel owners had little jurisdiction over their ships once they left port. COGSA, the Carriage of Goods by Sea Act, limits vessel owner’s liabilities to US$500 per shipping unit. It also relieves all their liability to shippers in 17 situations known as the Hague/COGSA Defenses. This means shippers have no legal recourse against vessel owners when their goods are lost or damaged by these 17 causes.
The 17 Hague/COGSA Defenses
Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:
- Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship;
- Fire, unless caused by the actual fault or privity of the carrier;
- Perils, danger, and accidents of the sea or of other navigable waters;
- Act of God;
- Act of war;
- Act of public enemies;
- Arrest or restraint of princes, rulers, or people or seizure under legal process;
- Quarantine restrictions;
- Act or omission of the shipper or owner of the goods, his agent or representative;
- Strikers, lockouts, stoppage or restraint of labor from whatever cause, whether partial or general: Provided that nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier’s own acts;
- Riots and civil commotions;
- Saving or attempting to save life or property at sea;
- Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods;
- Insufficiency of packaging;
- Insufficiency or inadequacy of marks;
- Latent defects not discoverable by due diligence; or
- Any other cause arising without the actual fault and privity of the carrier without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.
How do I make a marine insurance claim?
(A) SUBSTANTIATE YOUR CLAIM
A vital component of claims procedures is substantiating of the claim. The consignee must prove the claim was caused as a result of transit and occurred during the period of insurance coverage. Generally, follow the steps below to substantiate a claim.
1. EXAMINE EXTERNAL CONDITION OF PACKAGES: Upon delivery, examine the external condition of all packages before signing the delivery receipt. This may seem impossible with today’s business pace as it can delay trucks and cargo elevators. The trucking companies may charge you a minimal fee for the delay. However, when you thoroughly examine packages and note damage on delivery receipts, you protect your rights of recovery and minimize your losses.
2. NOTE EXCEPTIONS ON DELIVERY RECEIPT: All steamship companies, airlines, railways, trucking companies and harbor authorities must obtain a signature on a delivery receipt from the person or company taking delivery of cargo. All delivery receipts contain a clause stating the cargo was delivered in apparent good condition unless noted to the contrary. If your receiving department or cartage company signs a delivery receipt without noting damage, your coverage is at risk. By signing the delivery receipt without noting damage, you have legally acknowledged receiving the goods in “apparent good condition”. This destroys your chance to prove the goods were damaged before arriving at your premises and also destroys the chance that your insurance company will successfully recover the loss from the carrier. By signing the delivery receipt without noting damage, you are providing the carrier with a clean receipt.
It is important to note some tactics trucking companies may use to obtain clean receipts from you. They may try to convince you to sign for a visibly damaged package by saying it had been “opened by Customs”. Also, they may attempt to convince you a damaged package was signed for from the wharf or last carrier in damaged condition. You should not accept these claims until you have determined the goods are in proper condition. Remember, the consignee is sole judge in deciding how the packages appear and how they should be signed for. If delivery carriers attempt to prevent you from noting their delivery receipt, you should advise the trucker to hold the merchandise.
On future shipments, you should request your insurance company to send a surveyor to inspect the shipment on the trucker’s vehicle. Also, you should refuse a carrier if he/she suggests you sign for damaged packages “subject to inspection”. This notation does not imply that the package is damaged, and it becomes the responsibility of the consignee to prove when it occurred.
Finally, there is another reason not to sign for damaged packages. In the event your loss is not insured, signing for the damaged goods in “apparent good condition” jeopardizes your own rights to recover your loss from the carrier.
3. RECORD NUMBERS OF PACKAGES: When noting delivery receipts, record all case numbers that appear damaged. It is not enough to indicate “Five Cases Damaged” on the receipt.
You must record the numbers appearing on each case. For example: “Case #5, #6, #7 and #12 are in damaged condition”.
(B) DOCUMENTING THE CLAIM PLACES ALL CARRIERS ON NOTICE
Along with noting delivery receipts, it is vital to place all carriers “on notice” in the event of a claim.
What exactly is a Certificate of Insurance or Declarations page?
A Certificate of Insurance or Declarations page is a document which shows the policyholder’s name, liability limits, effective dates of the policy and also the broker’s name and address. This form is often requested from clients in order to show proof of insurance.
Do Public Adjusters have a Code of Ethics that they must follow?
Adjusters and Public Adjusters - Claims Handling, Code of Ethics
Yes; the following applies to all types of adjusters:
- An adjuster must put fair and honest treatment of the claimant above their own interests;
- An adjuster cannot steer any claimant needing repairs or other services to any person with whom the adjuster has an undisclosed financial interest or who is anticipated to provide the adjuster with any compensation for the referral for any resulting business;
- An adjuster should not provide any favored treatment to any claimant;
- An adjuster must adjust claims strictly in accordance with the insurance contract;
- An adjuster must not approach investigations, adjustments, and settlements in a manner prejudicial to the insured;
- An adjuster must make truthful and unbiased reports of the facts making a complete investigation;
- An adjuster must act with dispatch and due diligence in achieving a proper disposition of the claim;
- An adjuster must report to the Department any conduct by a licensed insurance representative of this state which violates any provision of the Insurance Code or Department rule or order;
- An adjuster must exercise extraordinary care when dealing with elderly clients to make sure they are not disadvantaged by failing memory or impaired cognitive processes;
- An adjuster cannot negotiate with a third-party represented by an attorney, if he has knowledge of the attorney. This does not apply to an insured or the insured’s resident relatives;
- An adjuster is permitted to interview any witness without the consent of the opposing counsel or party. However, the adjuster must avoid any suggestion calculated to induce a witness to suppress or deviate from the truth. If the witness gives a signed or recorded statement and requests a copy the adjuster must provide a copy;
- An adjuster cannot advise a claimant to refrain from seeking legal advice or retaining legal counsel;
- An adjuster cannot negotiate with or obtain a statement from a claimant or witness at a time they would reasonably be expected to be, in shock or serious mental or emotional distress as a result of physical, mental, or emotional trauma associated with a loss;
- An adjuster cannot conclude a settlement when the settlement would be disadvantageous to a claimant who has been traumatized or distressed by a loss; o An adjuster cannot give legal advice;
- An adjuster must be competent and knowledgeable as to the terms and conditions of the insurance coverage; In addition to the above, the following ethical constraints are specific to Public Adjusters.
- A PA cannot represent a person or entity whose claim the adjuster has previously adjusted while representing any insurer or independent adjusting firm;
- A PA must not represent or imply to a client that insurers, company adjusters, or independent adjusters routinely attempt to deprive claimants of their full rights under an insurance policy;
- A PA cannot represent or act as a company adjuster, independent adjuster, or general lines agent;
- A PA must advise the client In advance, of their right of legal counsel to represent them and that the choice is to be made solely by them;
- The PA must notify the client in advance of the name and location of any proposed contractor, architect, engineer, or similar professional, before a bid or proposal can be used by the public adjuster in estimating the loss or negotiating settlement. The client may veto any of these persons, in which case that person cannot be used in estimating costs;
- The PA must make sure any contractor, architect, engineer, or other professional used in formulating estimates is licensed by the Florida Department of Business and Professional Regulation;
- A PA cannot prevent or attempt to dissuade a claimant from speaking privately with the insurer, company or independent adjuster, attorney, or any other person, regarding the settlement of the claim;
- A PA cannot have any interest in salvaged property, except with the written consent and permission of the insured;
- A PA cannot accept referrals of business from persons whom the adjuster may conduct business or where there is any form of agreement to compensate the person for referring business to the adjuster. No Public Adjuster can compensate another person for the referral of business to them, except from one adjuster to another; this part of the rule has been added to F.S. 626.854(13);
- A PA’s contract with a client can be cancelled by the client without penalty or obligation within 3 business days after the contract is executed; o A PA cannot enter into a contract or accept a power of attorney which gives them the authority to choose the persons who will perform repair work; and
- A PA must not restrict or prevent an insurer, company adjuster, independent adjuster, attorney, investigator, or other person representing the insurer from having reasonable access at reasonable times to an insured or claimant or to the insured property that is the subject of a claim.
What does my Homeowners' Insurance Policy cover?
• Coverage A – Dwelling (Home)
• Coverage B – Other Structures (Garage, Pool Screen)
• Coverage C – Personal Property (Furniture, Clothes, Electronics)
• Coverage D – Alternative Living Expenses / Loss of Use (Living Elsewhere While Home is Fixed)
While each insurer calculates the coverage's differently, the value of the house itself is usually 80%-90% of the appraised market value. The “Other Structures” is usually 10%-20% of the house value. The “Personal Property” value is usually 40%-60% of the house value and the “Alternative Living Expense / Loss of Use” is 10%-20% of the house value. For example, if the appraised market value for the house is $100,000, then the dwelling coverage is $80,000 to $90,000 to fix or replace the home. The Other Structures coverage would be between $8,000 to $18,000 to repair a detached garage, pool screen, or shed. Personal Property coverage would be between $32,000 to $54,000 for belongings inside the home or in the other structures. Alternative Living Expenses / Loss of Use coverage would be $8,000 to $18,000.
The above amounts are the maximum that would be paid by the insurance company for your loss. If your home is damaged or destroyed and the damage is covered under your homeowner's insurance, you may have to live elsewhere while your home is being repaired. In that case, you're likely to incur additional living expenses. If you're renting out a room in your house and sustain insured damages to your home, additional-living-expense coverage often pays for the loss of rental income. However, this coverage is limited to the reasonable amount of time it would take for the residence premises to be repaired or, if relocating, a reasonable amount of time for the insured to become settled at a new location. This portion of the loss of use coverage is generally referred to as additional living expense or ALE. In order for there to be coverage for additional living expense, there must be a covered loss to the residence premises which causes it to be uninhabitable. As such, coverage related to additional living expense is generally very straightforward when attempting to determine its applicability. Therefore, there has been very little in the way of litigation which is directly related to additional living expense coverage. In other words, if there is coverage for building damage, there is generally going to be coverage for a claim related to additional living expense related to that particular loss for a reasonable amount of time. On the other hand, if coverage is denied for the building claim, there will generally be no additional living expense coverage.
You may also consider purchasing additional coverage for traditionally non-covered items such as fences.
What are examples of commercial litigation topics?
Below are examples of business disputes which may require commercial litigation:
∙ Partnership and shareholder disputes
∙ Government contract disputes
∙ International trade issues and anti trust matters
∙ Consumer fraud and consumer protection issues
∙ Securities litigation
∙ Interference with contract or business relationships
∙ Intellectual property
How much does it cost to hire an experienced commercial litigation attorney such as Bill Voss and The Voss Law Firm?
The cost of commercial litigation can vary greatly and depends on the complexity of the dispute, the willingness of the parties to negotiate, and the type of fee agreement you establish with your attorney.
Commercial litigation attorneys usually bill clients in one of two ways: hourly, or on a contingency basis. In an hourly arrangement, you can expect to pay at least $250/hour, and possibly up to $500 per hour; your case may require 20 hours or 200 hours. For example, if your lawyer charges $250/hour and your case goes through to trial, it may cost you $60k-$80k. In a contingency arrangement, you only pay your lawyer if you win. The lawyer gets an agreed-upon percentage, which in most cases is at least 1/3 of what is recovered (either in court or in a settlement). For example, if you think your case is worth $600k, your attorney would get $200k. You also may have to pay fees for experts, court filings, court reporters, and other costs. Remember, the costs in lawsuit vary depending on the facts of your case and the law firm you hire.
The Voss Law Firm handles all Commercial Litigation cases on a contingency-fee based arrangement. The percentage depends on the complexity of the case. Contact the experienced commercial litigation attorney Bill Voss for a free confidential consultation to discuss a fee arrangement and your case.
The Voss Law Firm, P.C. represents clients on a local, national and international basis. We proudly serve companies and individuals along the Gulf Coast and around the globe on a contingency fee basis. Our law firm collects nothing unless we recover on our client's behalf.